Trading can seem contradictory. To those looking in from the outside it might seem to have a strong gambling element, but of course a gambler’s approach is anathema to the professional trader. You learn a little more about trading and then realize that trading is about discipline and that capital preservation is the principal concern, and only then capital growth. “It’s the trades you don’t take that are key to your capital growth”, is a mantra that amateurs are encouraged to bear in mind. Just when you’re getting your head around that you may then hear that being too cautious is equally counter-productive. It can all seem confusing. Well, the truth is that it’s not, because if you’re able to develop a good sense of discipline in your trading then it literally becomes a ‘no brainer’, i.e. you don’t have to think or worry about whether to take a set-up or not. If a trade fulfills a set of rules that you have developed as part of your trading strategy then it’s there to take, equally if it doesn’t then you leave it. There is no shall I, shan’t I... Your trading strategy determines it for you.
It’s natural, for most of us, to approach uncertainty with caution, particularly with regards to money. We are hard wired to be cautious about money and fearful of losing it. For those new to trading it seems to be an area wracked with uncertainty and so not surprisingly it is natural to be very cautious. While caution is an excellent trait in trading, it becomes counter productive when it leads to indecision and not placing trades for fear of losing.
It’s therefore important to work out if a fear of losing is actually affecting your trading. A well kept trade journal will reveal all where, amongst other things, you carefully note the reasons why you took or didn’t take what appeared to be a potential trade setup. If your notes reveal indecision or uncertainty too often then it’s likely you’re sense of caution is getting in the way of your trading. This, of course, does not mean that you declare open season on any trade that looks vaguely like it might be going in the direction you would like, far from it. It’s simply that your carefully planned trading strategy, which will have been thoroughly back tested, dictates to you whether a trade should be taken or not. In effect, the decision is taken out of your hands.
It’s natural, for most of us, to approach uncertainty with caution, particularly with regards to money. We are hard wired to be cautious about money and fearful of losing it. For those new to trading it seems to be an area wracked with uncertainty and so not surprisingly it is natural to be very cautious. While caution is an excellent trait in trading, it becomes counter productive when it leads to indecision and not placing trades for fear of losing.
It’s therefore important to work out if a fear of losing is actually affecting your trading. A well kept trade journal will reveal all where, amongst other things, you carefully note the reasons why you took or didn’t take what appeared to be a potential trade setup. If your notes reveal indecision or uncertainty too often then it’s likely you’re sense of caution is getting in the way of your trading. This, of course, does not mean that you declare open season on any trade that looks vaguely like it might be going in the direction you would like, far from it. It’s simply that your carefully planned trading strategy, which will have been thoroughly back tested, dictates to you whether a trade should be taken or not. In effect, the decision is taken out of your hands.
Editors’ Picks
EUR/USD trades with negative bias around 1.1730 amid recovering USD; downside seems limited
The EUR/USD pair kicks off the new week on a softer note, though it remains within striking distance of the highest level since early October, touched last Thursday. Spot prices currently trade around the 1.1730 region, down less than 0.10% for the day.
GBP/USD holds steady above mid-1.3300s as traders await key data and BoE this week
The GBP/USD pair remains on the defensive during the Asian session on Monday, though it lacks bearish conviction and holds above the 200-day Simple Moving Average pivotal support. Spot prices currently trade around the 1.3360 region, nearly unchanged for the day.
USD/JPY extends losses below 155.50 amid Fed-BoJ monetary policy divergence
USD/JPY drops further below 155.50 in the Asian session on Monday. The pair remains offered as the Japanese Yen continues to draw support from the expectations of Fed-BoJ monetary policy divergence and a risk-off market profile. Fedspeak is next in focus.
Editors’ Picks
AUD/USD hovers around 0.6650, unfazed by poor China's activity data
AUD/USD is keeping its range around 0.6650 in Monday's Asian trading. little affected by downbeat China's activity data for November. The country's Retail Sales, Fixed Asset Investment and Industrial Production data came in below forecasts and refuelled economic growth concerns.
USD/JPY extends losses below 155.50 amid Fed-BoJ monetary policy divergence
USD/JPY drops further below 155.50 in the Asian session on Monday. The pair remains offered as the Japanese Yen continues to draw support from the expectations of Fed-BoJ monetary policy divergence and a risk-off market profile. Fedspeak is next in focus.
Gold regains traction toward $4,350 in the final full week of 2025
Gold price picks up bids once again toward $4,350 in Asian trading on Monday. The precious metal extends its upside to the highest since October 21 amid the prospect of interest rate cuts by the US Federal Reserve next year. The delayed US Nonfarm Payrolls report for October will be in the spotlight later on Tuesday.
Top Crypto Losers: DASH, SPX, PENGU – Privacy and meme coins lose ground
Altcoins, including Dash, SPX6900, and Pudgy Penguins, are leading losses as the broader cryptocurrency market remains cautious ahead of the macroeconomic data releases, such as the US Nonfarm payroll report, CPI data, and the Bank of Japan’s rate-hike decision.
Big week ends with big doubts
The S&P 500 continued to push higher yesterday as the US 2-year yield wavered around the 3.50% mark following a Federal Reserve (Fed) rate cut earlier this week that was ultimately perceived as not that hawkish after all. The cut is especially boosting the non-tech pockets of the market.
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